Time to Disinvest in Higher Education?

Richard Vedder: heretic

Richard Vedder, director of the Center for College Affordability and Productivity, suggests that the United States might be overinvested in higher education. We might be spending billions of dollars as a society on activity of marginal value.

Arguably, one of the most important functions of higher education in America is signalling to employers that a given individual is intelligent, industrious, and otherwise employable. Many students learn few job-relevant skills in college, Vedder writes in Forbes. As an alternative to spending four years in college, he suggests giving students tests certifying to skills and competencies demanded by employers.

Government subsidies and private philanthropy have prevented a healthy disinvestment in higher education from occurring,” he says. “Few colleges ever fail. … America could use the failure of at least 500 colleges over the next decade to assist in needed resource allocation.”

“If we were to spend, say, one-third less than we do on colleges,” Vedder writes, “we would lose relatively little output from declining labor productivity, and if those savings were invested in other productive ways, we likely on balance would be materially ahead of where we are today.”

(Hat tip: Dwayne Lunsford.)

Bacon’s bottom line: If Americans want to enjoy college as a luxury good — going to frat parties, cheering at football games, participating in late-night dormitory bull sessions, taking classes on obscure topics that will do them absolutely no good in the real world — and if parents want to pay for that activity, well, it’s a free country. People can do what they like.

But should public policy be blindly subsidizing millions of Americans to partake of the residential campus experience? What is the justification for state and federal government subsidies for higher education, if not to prepare Americans to participate in the workplace? There is a compelling public interest creating economic opportunity for all. There is no compelling public interest in immersing students in 18th-century English novels or the tenets of Tibetan religion.

Share this article


(comments below)


(comments below)


12 responses to “Time to Disinvest in Higher Education?”

  1. LarrytheG Avatar

    Why not look at the European model for college which essentially is a no-frills model that concentrates on education and anything beyond .. amenities, food, residential, sports – is not a mandatory part of the bundle.

    People here are stuck on a 20th century model for education when the world around us has changed dramatically to a 21st century world.

    The idea of a residential “experience” in college was wonderful but it’s time has passed… except for those willing to pay extra for it. It should not be what taxpayers pay for and that includes student loans.

    there needs to be two-tiers of tuition – one for core academic course and those 300-400 level courses that go directly to a degree that has demand in the economy,

    those that want to “learn” for their own edification – I have no problem with – as long as it;s on their own dime and not taxpayers.

    we are royally messed up about this now days and it goes back to K-12 where we spend more than twice as much on education than what is required to provide core education courses. Taxpayers are paying twice as much in property taxes for courses that are not required to graduate but instead optional. Under those conditions – choice schools COULD focus ONLY on core academic courses and do it for a lot less in dollars…

  2. LarrytheG Avatar

    Actually, “Disinvest” is the wrong way to view the issue. The reality is we have to choose WHAT we do want to INVEST in and we should not be using taxpayer dollars to “invest” in things that have no ROI to taxpayers.

    we’ve gone way astray on that and now the dialogue is about what students should be “entitled” to in their college “experience” – and it’s way beyond a core curriculum to a degree that has demand in the economy.

    1. No frills model….. We do have a no-frills model. It’s call the community college system. We used to have a no-frills model for four-year colleges, too. They were called commuter schools. But every one of those institutions — VCU, ODU, GMU — got caught up in the desire to become something they weren’t, to become a four-year residential college that climbed the ranks of the college rankings.

  3. LarrytheG Avatar

    is it the job of taxpayers to fund – ABOVE the no-frills model?

  4. Right on. Taxpayers should underwrite the cost of the no-frills (community college) option to make it the even more attractive and available alternative to that lovely, expensive, bankrupting residential experience. Cut the latter loose without State restrictions or support. Agree with LarryG, taxpayers should be concerned only with 100% funding the no frills, commuter-school baseline; the European approach with two tiers course-wise is the right way forward.

    1. LarrytheG Avatar

      I’d do the 4 yr – no frills model also – except I’d limit loans to only no-frills tuition – not other things.

      You know – this is the kind of thing I would expect from those in the General Assembly who are not fiscal conservatives – as opposed to Conservatives aligning themselves with the liberals…

      Somewhere in the middle of all of this – the people who are getting the free stuff need to be presented with the consequences of choosing the high-priced spread over the no-frills model -but as long as the costs is coming out of other folks pockets – why should they be concerned?

      I think once the choices are theirs as well as the costs – they will make better , more financially responsible choices.

      it boggles my mind that Conservatives talk-the-talk -but when they get down to the nitty-gritty- they walk just like liberals do – i.e. full boat for all, no-limit loans for all , – no problem the taxpayers will cover the costs or the govt will put price controls on the Colleges..

      just boggles the mind.. where are the Conservatives?

  5. Good points, excellent actually.

    Has someone brought this up to the ones making up the bills in the General Assembly?

    The other option is how you are going to deal with trying to get kids in STEM. The other problem is how do you deal with kids who go into business – as in accounting. A CPA is a tough and hard thing. Marketing, not so much.

  6. LarrytheG Avatar

    the typical/standard/common sense argument used by principled conservatives is not that you’re “disinvesting” but that you’re prioritizing the thing you can afford rather than arguing for more and more money or worse to call for the govt to set prices…

    so… we CAN afford no-frills tuition for most if not all students. Why not let that be what we DO “invest” in and let people take some responsibility themselves if they want more than “no frills”?

    in terms of what to encourage in terms of skills.. I favor informing people about what career paths lead to good incomes as well as informing them what college degrees don’t lead to good incomes and incentivizing the ones that do with loans and disincentivizing the ones that don’t by not giving loans.

    but at the end of the day – let people make choices, help them with basics, but let them own costs over and above the no frills.

    get that under control… and move on to other issues that need similar reforms.

  7. TooManyTaxes Avatar

    It’s easy for an organization to lose focus on its mission and concentrate on its own interests. Let’s start publishing the number of graduates who have a position in their chosen field within 6 months and within 12 months of graduation. And for high schools, the number of graduates taking remedial courses in college or vocational school.

    I also like Larry’s idea of informing prospective students about which degrees and/or certificates lead to good incomes and which do not.

  8. Jim, Mr. Vedder’s suggestion of “giving students tests certifying to skills and competencies demanded by employers” is downright scary. If employers don’t find the piece of paper called a BA to be a meaningful indicator of, for example, basic writing skills, but need to do their own testing to see if the poor kid actually learned something useful, our “higher education” has failed in every way but the extraction of money.

    1. LarrytheG Avatar

      Oh I could not disagree more Acbar.

      a BA MIGHT be an indicator of basic reading and writing skills but it’s no longer sufficient for 21st century jobs – employers want people who can use their reading and writing skills to read, understand, and articulate concepts – and be able to use problem-solving skills specific to particular technologies to accomplish what the employer needs.

      I don’t think a “bare” BA is a path to a good job anymore.

      am I wrong?

  9. LarrytheG Avatar

    Here’s an interesting study that seems to contradict the conventional wisdom that Virginia schools are pushing out the middle class:

    Students at elite colleges are even richer than experts realized, according to a new study based on millions of anonymous tax filings and tuition records.

    At 38 colleges in America, including five in the Ivy League – Dartmouth, Princeton, Yale, Penn and Brown – more students came from the top 1 percent of the income scale than from the entire bottom 60 percent.


    1. Washington University in St. Louis 21.7 6.1
    2. Colorado College 24.2 10.5
    3. Washington and Lee University 19.1 8.4
    4. Colby College 20.4 11.1
    5. Trinity College (Conn.) 26.2 14.3
    6. Bucknell University 20.4 12.2
    7. Colgate University 22.6 13.6
    8. Kenyon College 19.8 12.2
    9. Middlebury College 22.8 14.2
    10. Tufts University 18.6 11.8
    80. University of Virginia 8.5 15.0
    85. College of William & Mary 6.5 12.1
    208. Virginia Tech 2.8 15.0
    228. University of Mary Washington 2.9 17.6
    432. George Mason University 1.5 26.2
    675. Virginia Commonwealth University <1 31.0

    Students at elite colleges are even richer than experts realized, according to a new study based on millions of anonymous tax filings and tuition records.

    At 38 colleges in America, including five in the Ivy League – Dartmouth, Princeton, Yale, Penn and Brown – more students came from the top 1 percent of the income scale than from the entire bottom 60 percent.


    this is a tool that allows you to add colleges to see their numbers..

Leave a Reply